American expats living in the UK have been taking advantage of the currency fluctuations sparked by the Brexit vote, by snapping up British properties at reduced values.
The fall in the strength of the Pound against the US Dollar following the Brexit referendum in June has proven to be good news for many of the approximately 20,000 American expats living in the UK. Recently, the pound hit a 31-year low against the US Dollar.
Research from chartered accountants Bambridge shows that there has been a three-fold increase in the number of Americans making notable investments in the UK since June 2016. Purchases in the $250,000 to $500,000 price range have proved to be particularly popular.
The overwhelming majority of these transactions have come from those who had previously been renting in the UK but can now afford to buy, or for those who own a home and are now seeking an additional property for investment purposes.
“Sterling’s abrupt fall means that for Americans living in the UK, British property is suddenly on sale,” says Alistair Bambridge, a senior partner at the accountancy firm. “Whether they’re making a permanent home here or an opportunistic investment, buying a UK property now has a compelling logic.”
In July, business advisors Deloitte revealed that Manchester and the north-west of England has become a particular hotbed of American investment, with 54 per cent of all transactions between the US and the UK since 2013 made in the region.
However, American expats aiming to invest in British property or remain permanently in the country, though, should be aware of the tax implications of their transactions.
“US citizens must complete a US tax return every year wherever they are in the world,” explains Bambridge. “It’s essential that those making investments in Britain report it correctly to both the UK and US tax authorities. Double taxation agreements exist between London and Washington to protect American citizens living in the UK from being taxed twice, but failure to properly declare investments they make here can result in a large fine in the US.”
Article published 1st November 2016